EUR/USD dips as dollar firms on Yellen's take on jobs

The euro fell against a firming dollar on Friday after Federal Reserve Chair Janet Yellen said earlier that the economy continues to improve and with it, the labor market is strengthening as well.

In U.S. trading, EUR/USD was down 0.32% at 1.3238, up from a session low of 1.3221 and off a high of 1.3297.

The pair was likely to find support at 1.3221, the session low, and resistance at 1.3412, the high from Aug. 15

Speaking at the Federal Reserve Bank of Kansas City's annual Jackson Hole symposium, Janet Yellen said the U.S. economy is recovering and added the labor market is improving as well.

"More jobs have now been created in the recovery than were lost in the downturn, with payroll employment in May of this year finally exceeding the previous peak in January 2008. Job gains in 2014 have averaged 230,000 a month, up from the 190,000 a month pace during the preceding two years," Yellen said in prepared remarks of her speech.

"The unemployment rate, at 6.2 percent in July, has declined nearly 4 percentage points from its late 2009 peak. Over the past year, the unemployment rate has fallen considerably, and at a surprisingly rapid pace."

While Yellen pointed out that slack still remains in the labor market, her comments sparked fresh expectations for the Fed to close its bond-buying program around October and raise interest rates in 2015, possibly sooner than once anticipated.

Thursday's upbeat U.S. data bolstered the greenback as well.

The Federal Reserve Bank of Philadelphia said that its manufacturing index topped a three-year high of 28.0 this month from July’s 23.9 reading. Analysts had expected the index to decline to 19.2 in July.

Separately, market research group Markit said that its preliminary U.S. manufacturing purchasing managers’ index increased to a four-year high of 58.0 this month from a final reading of 55.8 in July. Analysts had expected the index to ease down to 55.7 in August.

Data also showed that U.S. existing home sales increased 2.4% to 5.15 million units last month from 5.03 million in June. Analysts had expected existing home sales to dip 0.4% to 5.02 million units in July.

Also on Thursday, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending Aug. 16 decreased by 14,000 to 298,000 from the previous week’s revised total of 312,000.

Analysts had expected jobless claims to fall by 12,000 to 300,000 last week.

Elsewhere, the euro was down against the pound, with EUR/GBP down 0.28% at 0.7988, and down against the yen, with EUR/JPY down 0.25% at 137.57.

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